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Nestle India’s net profit rises 10.7% to Rs 538.6 crore in June quarter

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Nestle India's net profit rises 10.7% to Rs 538.6 crore in June quarter

Nestle India reported 10.7% year-on-year increase in net profit to Rs 538.6 crore for the quarter ended June 2021, marginally below street estimates. The maker of Maggi noodles and Nescafe coffee said in a stock exchange filing that its revenue increased 14% at Rs 3,476 crore for the quarter under consideration, which was marked by the intense second Covid-19 wave.

The company reported double digit growth for Maggi, KitKat and Munch, and 105% growth through e-commerce channels, which now contribute 6.4% of domestic sales. It said over 1,000 people have onboarded Nestle through regular hiring, apprenticeship and internship. Nestle has invested about Rs 25 crore in a range of sustainability projects in the quarter, the company said.

Nestle chairman Suresh Narayanan said in a statement: “Our efforts to ensure last mile access were aided by e-commerce and in particular hyperlocal (quick commerce) channels which grew by 147% in the first half of this year,” Narayanan said.

Total and domestic sales for the quarter increased by 13.8% and 13.7% respectively, on a base impacted by Covid-19 induced lockdowns with production disruptions across factories, it said, adding that domestic sales growth was driven by volume and mix.

Nestle said it has invested close to Rs 1,000 crore so far, from its overall commitment made last year to invest Rs 2,600 crore in its Indian operations over a three-four year period. The company’s board approved the sale of 20% stake in Sahyadri Agro, a company engaged in milk collection, due to change in business conditions.

“Nestle is enhancing its rural distribution network to increase the penetration of existing brands, which are largely considered urban-centric. This would lead to sustainable growth over a longer period of time,” ICICI Direct wrote in a report.

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